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The Federal Government announced yesterday that they are close to settling with banks over the robo-signing scandal. But the actual value of the final settlement hinges on California’s participation.

California’s Attorney General, Kamala Harris, previously pulled her support for the settlement. California is a state that has had very high foreclosure rates and presents a liability for banks if future cases of wrongful foreclosure emerge. The banks will sweeten the settlement if California agrees to be part of the settlement.

The Obama administration will present different proposals to the banks depending on whether California agrees to participate in the settlement. As part of the settlement individual state Attorneys Generals would have to agree not to pursue the banks for future claims.

In the past few months Attorneys Generals from New York and Delaware have pulled out of the settlement talks because it is too focused on robo-signing and not other unsavory foreclosure practices.

California residents have been subjected to wrongful foreclosures in unprecedented numbers. Some of the homeowners have been able to keep their homes with the help of a foreclosure attorney.

Once the settlement has been agreed on, homeowners will be eligible for principle write-downs, modification and compensation for wrongful foreclosure.

All this will take time, so a person who has defaulted on their home loans need to consult with a foreclosure lawyer. Foreclosure attorneys can negotiate for a mortgage modification or fight a foreclosure in court.